Meituan, one of the largest food delivery companies in China, has just been fined $533.8 million by regulators.
The company was fined under the grounds of "monopolistic behaviour", and abusing its dominant market position to take advantage of small businesses.
What Happened:
- In April 2021, China's regulatory authorities started an antitrust probe into Meituan’s suspected abuse of market dominance in the online food delivery market.
- After investigation, it was determined that Meituan has taken advantage of its dominant market position to implement differential rates and delaying the launch of businesses that applied for its services.
- Meituan also encouraged merchants to sign exclusive cooperation agreements, collected exclusive cooperation deposits, and used data, algorithms, and other technical means to further strengthen their market dominance.
Why It Matters
- The fines imposed on Meituan make up approximately 3% of the company's 2020 revenues.
- Meituan's fines were expected to be over $700 million instead of $533 million.
- This move falls in line with China regulator's goals of ensuring small and medium enterprises are able to thrive, and that big technology companies do not yield too much power.
